Washington Pushes for More California Energy While Sacramento Pushes Back

The growing divide between federal and California energy policy is again on display, this time nine miles off the Ventura County coast.

According to the San Francisco Chronicle, Southern California producer DCOR LLC is seeking federal approval to conduct hydraulic fracturing on as many as 16 existing wells connected to Platform Gilda in the Santa Barbara Channel. The proposal could increase production from approximately 1,100 barrels per day to as much as 4,000 barrels per day.

The project also provides another clear illustration of the dramatically different energy policies being pursued by Washington and Sacramento.

The Trump administration has declared increased domestic energy production a national priority. The Bureau of Ocean Energy Management (BOEM) prepared an Environmental Impact Statement evaluating DCOR's proposal under procedures established following President Trump's declaration of a national energy emergency. DCOR argues that increasing production from existing wells serves the national interest by reducing dependence on foreign oil and efficiently developing domestic petroleum resources.

California officials are moving in precisely the opposite direction.

The California Coastal Commission is considering an objection to the project under the Coastal Zone Management Act, arguing that offshore hydraulic fracturing presents unacceptable risks to marine resources and the California coastline. Attorney General Rob Bonta has separately challenged the federal government's approach, contending that BOEM must satisfy environmental review requirements stemming from previous litigation over offshore well stimulation.

The debate is particularly noteworthy because the proposed activity involves existing wells on an existing platform, rather than development of an entirely new offshore field.

The Chronicle also spoke with CIPA CEO Rock Zierman, who challenged the increasingly ideological treatment of hydraulic fracturing.

“We’ve been doing it for years and years and years without ill effect,” Zierman told the Chronicle. “There’s become sort of an emotional or religious belief against it.”

Hydraulic fracturing is a well-completion and stimulation technology, not a synonym for an oil spill. BOEM's environmental review concluded that the probability of a catastrophic spill associated with the proposal is low and that the stimulation fluids would remain within a closed-loop system. The federal review was conducted pursuant to the administration's expedited energy-emergency procedures, an approach California officials and environmental organizations strenuously dispute.

For California's independent producers, however, the larger policy question extends well beyond Platform Gilda or offshore production.

California continues to consume enormous quantities of petroleum. The question is increasingly whether Californians will produce that energy themselves or purchase it from somewhere else.

Every barrel of California production that policymakers prevent does not automatically eliminate a barrel of California petroleum demand. To the extent demand remains, the supply must be replaced from another source. That fundamental reality is too often absent from the state's energy debate.

The Trump administration's position is straightforward: if oil is going to be consumed in the United States, producing more of it domestically can strengthen energy security, support American jobs, and reduce reliance on foreign suppliers. The administration is pursuing that philosophy not only through Platform Gilda but through consideration of additional federal offshore lease sales and other efforts to restore California energy infrastructure.

California has largely adopted the opposite philosophy, increasingly restricting production while remaining dependent upon petroleum.

That contradiction has significant consequences for CIPA members.

Independent California producers operate under some of the most stringent environmental, labor, and regulatory standards anywhere in the world. Yet state policy continues making it more difficult for those producers to supply a product Californians continue to use every day.

The result is not necessarily the elimination of petroleum. It can simply mean replacing California barrels with barrels produced elsewhere.

Platform Gilda may be an offshore project involving a company that is not a CIPA member, but the underlying policy fight should look very familiar to California's independent producers. Washington increasingly views domestic petroleum production as a strategic asset. Sacramento continues to treat petroleum production as something to be eliminated.

For an industry trying to keep Californians supplied with reliable energy while preserving California jobs, tax revenue, and domestic production capacity, that distinction could hardly be more consequential.